Search Results for ‘lennar’

Lennar Corp: Being Right Feels So Good

On January 7, 2009, Barry Minkow and the Fraud Discovery Institute issued an initial report on Lennar Corporation (NYSE:LEN), citing 10 Red Flags of Fraud.  Lennar immediately came forward and called FDI and its investigators liars, saying in one press release:

Today convicted felon Barry Minkow, acting as an agent for a disgruntled litigant, Nicolas Marsch III, posted false and inflammatory accusations concerning Lennar.

New Lennar Analysis: 72% chance of bankruptcy

Barry Minkow and the Fraud Discovery Institute have just released a new report on Lennar Corporation (NYSE: LEN) by a Wall Street expert. Their press release summarizes the opinions of the expert:

The Fraud Discovery Institute, Inc. released late this afternoon a new 16 page report completed by Wall Street analyst Reggie Middleton. Mr. Middleton was the analyst who predicted in 2007 that Lennar Corporation (NYSE:LEN) was in serious financial trouble because of the way they handled their off-balance sheet transactions.

Lennar Corporation (NYSE:LEN) Confirms Fraud Allegations; Debunks Own Lies

In an interesting twist in the case of the Barry Minkow (Fraud Discovery Institute) fraud investigation of Lennar Corporation (NYSE:LEN)… it appears that Lennar itself has debunked the company’s own lies.

In a new report released today, FDI lays out the original fraud allegations, the lies Lennar used to cover up, and the new admissions which prove the initial allegations were true (and Lennar’s cover up was full of lies).

Here are the details:

Lennar CEO Lies About Losses in Joint Venture

Lennar Corporation (NYSE:LEN) CEO Stuart Miller was on CNBC on Friday to “respond” to allegations made by Barry Minkow and Fraud Discovery Institute about the company’s propensity for fraud. In the process of trying to diminish the impact of the serious allegations, Miller got caught in a blatant lie.

One of the allegations made in FDI’s original report on Lennar is that the company profits from cheating joint venture partners out of the money due to them. Minkow specifically named the LandSource venture (a project now in bankruptcy) as an instance in which Lennar profited while the other parties came out big losers.

Lennar CEO responds to Barry Minkow and Fraud Discovery Institute

Early today, Barry Minkow and Fraud Discovery Institute released a report on Lennar Corporation (NYSE:LEN), highlighting what the authors believe to be ten red flags of fraud at the company. Lennar’s stock was hit hard by the news.

It didn’t take long for Lennar’s CEO Stuart Miller to speak out against the allegations. About all he was able to do, however, is try to discredit the messenger. Lennar didn’t have any substantive response to any of the allegations, they simply highlighted Barry’s well-known criminal past and referred to Nicolas Marsch (Barry’s client) as a “disgruntled litigant.”

Barry Minkow Sentenced to Five Years’ Imprisonment on Stock Manipulation Conspiracy

United States Attorney’s Office
Southern District of Florida
July 21, 2011 Press Release

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced that defendant Barry Minkow, 44, of San Diego, California, was sentenced today on one count of conspiracy to commit securities fraud, in violation of Title 18, United States Code, Section 371, for his participation in a scheme to manipulate the stock price of Lennar Corporation (Lennar) through false and misleading statements about Lennar’s business operations and management. At today’s hearing, U.S. District Court Judge Patricia A. Seitz sentenced Minkow to five years in prison, to be followed by three years of supervised release. In addition, the Court ordered Minkow to pay $583,573,600 in restitution.

Fraud Discovery Institute Ends Investigation of Medifast Inc.

UPDATE: On February 17, 2010, Medifast Inc. filed suit in US District Court, Southern District of California, alleging defamation, violation of California Corporations Code, and unfair business practices. On March 29, 2011, Judge Janis Sammartino dismissed all of Medifast’s claims against me in her ruling on my anti-SLAPP motion.

In mid-2009, Barry Minkow and Fraud Discovery Institute began investigating Medifast Inc. (NYSE:MED), and published several reports on the company and its business model. The company was compared to Your Travel Biz (YTB), a company that was under fire from the authorities for being an alleged pyramid scheme.

There were questions about Medifast’s auditors,  but most notably, the company was criticized for the fact that its financial growth was due almost completely to the recruitment of new “coaches” into its Take Shape for Life (TSFL) division. A month ago, the most recent report on Medifast’s recruitment business was published by multi-level marketing expert Robert FitzPatrick, and Medifast’s management promptly misled shareholders by claiming these allegations were made by “convicted felon” Barry Minkow.

The Frauds Investigated and Exposed by Barry Minkow and Fraud Discovery Institute

UPDATE: In March 2011, Barry Minkow pleaded guilty to once charge of insider trading related to Lennar Corp., and was later sentenced to prison. I had no knowledge of any of his bad acts relating to Lennar or any other company, and I did not participate in any bad acts. I stand behind all of the work that I did for Mr. Minkow.

I’ve had enough of critics calling Barry Minkow a “self-professed” fraud investigator. These critics act as if there is no evidence that Minkow has successfully investigated fraud… thus he is a “self-professed” fraud uncoverer.

I know from firsthand experience that Barry has successfully investigated many frauds. (Full disclosure: I have been paid by FDI for work I have done related to their investigations, but none of these cases are shown below.) But what if I didn’t know about his investigations? Could I go to third party, independent sources to verify his track record (or lack thereof, as the critics imply) in uncovering fraud?

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